Carmax Inc (NYSE:KMX) stock rose 0.12% (As on December 20, 11:19:41 AM UTC-4, Source: Google Finance) after the company reported third-quarter earnings and revenue that topped analyst expectations, driven by increases in unit sales and strong margins. Combined retail and wholesale used vehicle unit sales were 320,256, an increase of 5.8% from the prior year’s third quarter. Total retail used vehicle unit sales increased 5.4% to 184,243 compared to the prior year’s third quarter. Comparable store used unit sales increased 4.3% from the prior year’s third quarter. Total retail used vehicle revenues increased 1.2% compared with the prior year’s third quarter, driven by the increase in retail used units sold, partially offset by the decrease in average retail selling price, which declined approximately $1,100 per unit or 3.9%. Total wholesale vehicle unit sales increased 6.3% to 136,013 versus the prior year’s third quarter. Total wholesale revenues increased 0.3% compared with the prior year’s third quarter, driven by the increase in wholesale units sold, partially offset by the decrease in the average wholesale selling price of approximately $500 per unit or 5.7%. KMX  bought 270,000 vehicles from consumers and dealers, up 7.9% compared to last year’s third quarter. Of these vehicles, 237,000 were bought from consumers and 33,000 were bought through dealers, an increase of 4.1% and 46.7%, respectively, from last year’s third quarter. Online retail sales accounted for 15% of retail unit sales, compared to 14% in the third quarter of last year. Revenue from online transactions, including retail and wholesale unit sales, was $2.0 billion, or approximately 32% of net revenues, up from 31% in last year’s third quarter.

Further, CAF income increased 7.6% to $159.9 million driven by growth in CAF’s net interest margin percentage and average managed receivables. This quarter’s provision for loan losses was $72.6 million compared to $68.3 million in the prior year’s third quarter.

As of November 30, 2024, the allowance for loan losses of $478.9 million was 2.70% of ending managed receivables, down from 2.82% as of August 31, 2024. The allowance for loan losses was down from 2.92% a year ago, due to the effect of the previously disclosed tightening of CAF’s underwriting standards.

KMX in the third quarter of FY 25 has reported the adjusted earnings per share of 81 cents, beating the analysts’ estimates for the adjusted earnings per share of 61 cents. The company had reported the adjusted revenue growth of 1.2 percent to $6.22 billion in the third quarter of FY 25, beating the analysts’ estimates for revenue of $6.04 billion.